Explanation : Putable preference shares are less risky than their callable counterparts.
They give the investor the option to put the shares back to the company.
Because of the lower risk they will provide a lower expected rate of return.
Common shares are the most risky, whether or not they are dividend
paying, and are likely to offer the highest expected return.
Explanation : Putable preference shares are least risky as they give the investor an
option to sell the shares back to the issuer at a pre-determined price. This
pre-determined price creates a floor for the share’s price that reduces the
uncertainty of future cash flow of investors.